Eurozone heading for decade-high growth rates

While Britain and the rest of the European Union are struggling to agree on divorce terms, it’s increasingly clear that on the economic front they are diverging sharply.

In closely watched surveys of economic activity, financial information company IHS Markit said Tuesday that the economy of the 19 EU countries that use the euro is heading for decadehigh growth rates while Britain’s is increasingly sluggish — largely due to uncertainty surrounding Brexit.

The purchasing managers’ index, a broad gauge of economic activity, for the eurozone was unchanged at 55.7 points in August. The index is on a 100-point scale, with anything above 50 indicating expansion.

Though output growth in the third quarter is slightly down on the second quarter, the firm said the single currency bloc is on course for economic growth of 2.1 percent this year, its highest since 2007, when the global financial crisis started to bite.

The firm’s chief business economist, Chris Williamson, said the moderate growth slowdown from the second quarter is no cause for alarm given that business orders remain strong.

The scale of the eurozone recovery this year has caught many economists by surprise. At the year’s start, many feared that the region, already disturbed by Britain’s vote last year to leave the European Union, ongoing concerns over the euro and a slew of key elections, would face a difficult time.